The Obamacare Train Wreck
Implementation hits hurdle after hurdle — let us count the ways.


Andrew Stiles

The White House plans to delay yet another provision of Obamacare, the New York Times revealed on Monday, in what was described as “another setback for President Obama’s health-care initiative.” Indeed, it seems that every week the administration offers up a new example of the implementation “train wreck” of which Obamacare architect Max Baucus (D., Mont.), among others, has warned.

Here are nine examples of how Obamacare implementation hasn’t gone according to plan:

1. Caps on Out-of-Pocket Insurance Costs
The Obama administration plans to delay until 2015 a provision that limits out-of-pocket health-care costs, including deductibles and co-payments, for individuals ($6,350) and families ($12,700). In the meantime, many insurers will be able to set higher limits on out-of-pocket costs, or no limit at all.

The obscure ruling, which received attention this week despite being published on the Labor Department’s website back in February, has drawn complaints from advocacy groups representing individuals with chronic illnesses, who argue that patients requiring expensive drug treatments will face exorbitant out-of-pocket costs in the absence of caps. “The promise of out-of-pocket limits was one of the main reasons we supported health-care reform,” Theodore M. Thompson, a vice president of the National Multiple Sclerosis Society, told the New York Times.

President Obama repeatedly touted the limits on out-of-pocket expenses in his effort to win support for the law. “No one should go broke because they get sick,” Obama told a joint session of Congress in September 2009. In explaining the decision to delay the requirement, a senior administration official told the Times, “We had to balance the interests of consumers with the concerns of health-plan sponsors and carriers” who “asked for more time to comply.”

2. The Employer Mandate
Last month, the White House decided to delay the Obamacare provision requiring all businesses with more than 50 employees to provide health insurance to full-time workers or pay a fine ($2,000 per worker). Senior Obama adviser Valerie Jarrett said the unilateral delay, which will cost around $12 billion, according to the Congressional Budget Office, was evidence that the administration was “listening” to the business community.

Although some have questioned the legality of the administration’s unilateral action, the president has dismissed such criticism, telling the New York Times: “Where Congress is unwilling to act, I will take whatever administrative steps that I can in order to do right by the American people.”

In fact, the House of Representatives recently voted to enshrine the employer-mandate delay into law; Obama threatened to veto the legislation, calling it “unnecessary.” Republicans have seized on the president’s decision; arguing that big businesses shouldn’t receive special treatment, they are pushing for a delay of the even more controversial individual mandate, which is set to take effect in 2014. The House also passed a bill to delay the individual mandate for one year — with the help of 35 Democrats.

3. Anti-Fraud Measures
Days after announcing the employer-mandate delay, the Obama administration decided to delay another significant provision in the law that requires the government to verify the income and insurance status of applicants for federal health-care subsidies. The White House has put off implementation of the provision until 2015. In the meantime, according to the Washington Post, the government health-care exchanges can simply accept “the applicant’s attestation” regarding his or her eligibility and household income “without further verification” in determining the allotment of taxpayer subsidies.  

4. CLASS Act
The “fiscal cliff” deal enacted earlier this year repealed a provision of the health-care law known as the CLASS Act, a long-term-care insurance plan championed by the late Senator Ted Kennedy (D., Mass.), after the administration was forced to acknowledge that the program was fiscally unsustainable. The CLASS Act was inserted into the law despite repeated warnings from Medicare’s chief actuary that the program “doesn’t look workable.” Even former senator Kent Conrad (D., N.D.) described it as “a Ponzi scheme of the first order.” Additionally, the CLASS Act — which was designed to collect five years’ worth of premiums before paying out any benefits, and therefore was scored as reducing the deficit by $70 billion — was critical in lowering the projected fiscal impact of Obamacare, at least on paper.


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